751G.00/12–1253: Telegram
The Chargé at Saigon (McClintock) to the Department of State
secret
Saigon, December 12, 1953—4
p.m.
1016. Sent Paris 297; repeated information Vientiane, Phnom Penh, Hanoi unnumbered. During course of my conversation this morning with Laotian Prime Minister, he made following points:
- 1.
- Political and military situation of Laos had materially improved of recent months. This was due to two factors: (1) Success of Laotian military build-up backstopped by MDAP assistance and French Union cadres, which was now paying off in terms of actual successful military operations against Viet Minh; (2) actual spelling out of Laotian independence in recently signed Franco-Laotian treaty which gave Laos a distinctly stronger political position internationally than it had before.
- 2.
- Prince Souvanna Phouma was deeply concerned, however, at economic fragility of his country. He said, “we are building a nation from its foundations, whereas in Vietnam and even Cambodia the economic system has long been established and there is a very considerable investment of French and other capital in the economic machine”. Prime Minister emphasized basic poverty of his country and extraordinary charges placed on so weak an economy by fact of war. He likewise pointed to disastrous effects of devaluation which, by raising cost of imported commodities, had made it necessary for him to cut his program of public works in half.
- 3.
- Prime Minister said that tentatively he planned to attend quadripartite economic conference early in January at Paris to discuss continuation or modification of existing financial and economic agreements. He expressed some doubt, however, if conference could be held on schedule in view of uncertainty re Cambodian attitude. He said recent dismissal of Cambodian foreign minister provided no ground for optimism that (a) Cambodians knew really what they wanted or [Page 921] (b) that they would, once they found out what they wanted, come in to join economic and financial system with Vietnam and Laos.
- 4.
- Prime Minister commented bitterly that not only had Vietnamese Government refused to pay Cambodians their share (16 percent) of this year’s customs receipts for all of Indochina, but had likewise not paid Laos its 7 percent. He said Vietnamese Government had offered no excuse for this failure to meet its obligations to the other two Associated States.
Prince Souvanna Phouma returns to Vientiane tomorrow.
McClintock